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Given the Italians limited forces I never know what to do with them in the early game. I often want them in the war fairly early in order for the germans to start lending them resources so they can become useful.

This last time I had them declare war on the Allies and in their surprise impulse invade Cyprus (Which reduced the resources being sent to France, so not inconsequential.) and had a couple of subs take shots at convoys.

What else is worth it for the Italians to declare war?

A sloppy CW setup is one. No unit in Malta (or even better: Gibraltar) will always mean that I DoW the CW. But there are not a lot of sloppy CW players around... [:D]

Besides that, I believe getting Italy in the war early is better than to wait. The longer they wait, the longer it takes for them to build up their airforce...

There are bits of North Africa or Syria / Lebanon you might be able to pocket before France is Vichied. So a sneaky-beaky invasion in the surprise impulse has merit. Also no one makes you DoW both CMW & France, so you could pick one of them (likely CMW). This improves the balance in the Med. If they want to restore their advantage, they have to DoW Italy, which gives you your US entry chits back - though it is a double-edged sword: you need to make sure you don't get caught with your trousers down in their surprise impulse.

Cheers

Adrian